Asian shares were set to gain on Wednesday, encouraged by buoyant US moves that followed stronger-than-expected manufacturing indicators while the dollar emerged from its recent lows against the euro.

Investors in Asia await Australia's gross domestic product data, which is expected to confirm the economy fell into its deepest slump since the Great Depression.

However, Tom Piotrowski, a market analyst at Australian broker CommSec, said market participants are now likely to look past the dire historic numbers as more recent data suggests the global recovery is gaining momentum.

“The bigger picture is coming together quite well,” he said.

He noted the risk on Australian GDP is that comes in higher than expected, which would help sentiment. Australian equities, which have underperformed because of the strong local currency, also could be helped by the dollar's latest rise.

Australian S&P/ASX 200 futures were up 0.39 per cent in early trading. Tuesday's strong Wall Street finish has also set a positive tone. Both the Nasdaq and S&P 500 hit records to start September on a high note on Tuesday. Those gains came after US manufacturing indicators showed expansion, with the reading from the Institute for Supply Management hitting its highest level in nearly two years.

Euro zone manufacturing activity also grew last month to stay on a path toward recovery, though factory managers remained wary about investing and hiring more workers.

“At the moment the market is seeing a lot of positive momentum,” said Greg Boutle, US head of equity and derivative strategy at BNP Paribas in New York. “If you get OK-to-good data and anything from the political landscape that looks like its moving more toward a compromise that's constructive for markets.”

Stimulus measures

The US Federal Reserve dabbed in more support for the economy as Governor Lael Brainard said the central bank would need to provide more stimulus to fulfill its promise of stronger job growth and higher inflation.

Also helping sentiment, US Treasury Secretary Steven Mnuchin told a congressional panel he was willing to provide more money for state and local governments, a key sticking point in the fight over more stimulus.

White House chief of staff Mark Meadows said on Tuesday Senate Republicans are likely to take up their Covid-19 relief bill next week offering $500 billion in additional federal aid.

US stocks also got a boost from technology shares as Apple rose 3.98 per cent after a report the company had requested suppliers to make at least 75 million 5G iPhones for later this year.

The Dow Jones Industrial Average rose 0.76 per cent, the S&P 500 gained 0.75 per cent, and the Nasdaq Composite added 1.39 per cent.

The better-than-expected US manufacturing data also helped nudge oil prices higher on Tuesday, suggesting further demand for fuel if the economy recovers.

Brent crude futures settled up 30 cents at $45.58 a barrel. US West Texas Intermediate futures settled at $42.76 a barrel, up 15 cents.

The dollar firmed about 0.1 per cent against a basket of major currencies as the euro gave up some of its recent gains. The common currency had earlier climbed above $1.20 for the first time since May 2018.

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